- Eurozone CPI[1] Beats Estimates. Actual 9.1% vs 9% Expected, as Cost of Living Crisis Worsens.
- European Natural Gas[2] Prices Resume Advance, as Traders Weigh Supply Risks.
- German Unemployment Rate Increased to 5.5% vs 5.4% Expected.
DAX 40: Indecisive as Red-Hot Eurozone Inflation Stokes Rate Hike Fears
The DAX[3] struggled in European trade continuing its decline since yesterday’s rejection of the key 13000 level. The index flip-flopped between gains and losses, falling 200 odd points from early session highs, weighed down by worsening unemployment in Germany and record-setting Eurozone CPI numbers[4]. German unemployment rate meanwhile increased to 5.5% from 5.4%, as expected.
For all market-moving economic releases and events, see the DailyFX Calendar[5]
Last Friday saw a sentiment shift thanks to hawkish rhetoric from Fed[6] Chair Jerome Powell, with market bets on a shallower trajectory for Federal Reserve tightening receding, raising the prospect of more losses for stocks and bonds in an already difficult year. This was seen by Friday’s selloff which seems set to continue, following some early week gains. The weekend and early this week saw hawkish rhetoric from several European Central Bank[7] members with market pricing quite firmly on the hawkish side, currently 70bp is priced in for September and 160bp by year-end, next week’s central bank meeting is key.
The New York Session: Forex Trading Tips[8]
Energy shares and utilities led declines in Europe, extending their selloff to a fourth session as investors continue to fret over Russian gas supplies. Europe's gas prices have backed down from record highs but are now climbing once more as Russia has shut off gas flow along the Nord Stream pipeline to Germany, for the second time in as many months.
